Creating A Customer-Centric Organisation

Monday 27 February, 2012

by Michael Haynes

Today’s business environment is characterised by highly competitive markets, tough economic conditions and demanding - but often less loyal - customers. Businesses worldwide are attempting to be more responsive to customer's needs by adopting strategic, customer-centric approaches. Discover the essential characteristics that organisations must possess in order for them to truly operate in a customer-centric manner.

Becoming a customer focused organisation requires much more than companies simply creating roles such as "Customer Experience Officers" or senior leaders within companies declaring that it is the "new direction" of the organisation in their strategic plans. There are essential characteristics that organisations must possess in order for them to truly operate in a customer-centric manner. They can be classified into 4 categories:

1. Senior leadership / culture
   
2. Analytical and strategic capabilities
   
3. Processes
   
4. Knowledge management

Essential ingredients to creating a truly customer-centric organisation

1. Senior leadership / culture
   
   One of the first characteristics that  organisations must have in order to become customer-centric is that they must have senior leadership commitment and support. Senior management within companies must take a "top-down" approach whereby they champion, support and are committed to ensuring that all strategies, decision-making and operations are driven by the priorities and preferences of their customers.
   
   To achieve this necessitates that senior management:
   
   
   • Engage with customers directly so they have an awareness and knowledge of customer issues and priorities
     
   • Create and foster a culture of collaboration, sharing information and working cross functionally throughout the organisation. It is critical that such an environment is created as meeting customer needs will often require business units / teams working together.
     
   • Have their management and business teams committed and working towards this goal
     
   • Have KPIs and compensation schemes tied to working effectively in a customer-centric manner
     
   Creating such a customer-centric and collaborative environment is often the biggest challenge for organisations. The difficulty in doing so is often attributed to senior management not understanding the value and impact that taking a customer-centric approach can have on business performance.
   
   To gain the support of senior leadership in such instances, a "bottom up" approach should be undertaken to demonstrate the impact and value of operating in a customer-centric manner. This can be achieved by a business unit undertaking a "pilot" project aligned to the company's strategic business objectives that would potentially satisfy a customer requirement. Examples of such pilot initiatives include trialing a new program or solution with a particular group of customers.
   
   To increase the likelihood of adopting more customer-centric initiatives, the results would then be documented and communicated across the organisation. The results will need to demonstrate impact on both the client's and your organisation's performance. As more support is gained from the senior leadership team, additional customer-centric initiatives can be undertaken and rolled out across the organisation.
   
2. Analytical and strategic capabilities
   
   
   1. Analytical capabilities
      
      Organisations must also possess strong capabilities in analysing market, customer, competitor and financial data. Such capabilities are essential as they enable an organisation to gain a strong understanding of market and customer requirements, identify opportunities as well as financial impacts and potential competitor responses.
      
      However, the ability to effectively conduct such critical activities is proving to be a challenge for many companies. A global study recently conducted by MIT Sloan Management Review revealed that 40% of respondents found analytics to be one of the greatest challenges in their organisations.
      
      This difficulty in analysing the data can be attributed to:
      
      
      • An increasing amount of data that organisations are producing
        
      • The increasing use of multiple channels - such as call centres, web, mobile and social media - to engage and service customers, also resulting in a greater amount of data available
        
      • The many different types of data - such as survey, web, campaign, purchase data, secondary research reports - which come from various sources
        
      Organisations must overcome these challenges and not succumb to analysing massive amounts of data without any clear direction or outcome - often referred to as "analysis paralysis".
      
      Before embarking on any analysis, organisations should:
      
      
      • Define the business objectives
        
      • Define the insights / questions needed to meet business objectives
        
      • Identify the data required
        
      • Determine how to source the required data
        
      Effective data analysis will require highly skilled staff. Organisations that do not possess such internal capabilities will need to either hire staff with such skill sets and/or utilise specialists to perform such activities as well as train staff.
      
      However, merely conducting analysis is not enough. Effective communication of data and insights to the management team is critical to gaining senior management's championing, support and commitment to customer-centric initiatives. Once the analysis is completed, the insights must be conveyed easily and effectively to the senior leadership team so they can quickly absorb the meaning of the insights and determine the priorities.
      
      Therefore, it is imperative for organisations to have an effective internal communications strategy. This may include using a multi-channel approach comprised of:
      
      
      • Executive briefings
        
        Ideally conducted face-to-face, they enable the management team to gain a strong understanding of the insights gained and their implications. May include the use of simulations / scenarios, data visualisation.
        
      • Written executive summaries
        
        To further reinforce executive briefings as well as provide additional detail to assist in their decision-making. 
        
   2. Strategic capabilities
      
      In addition to possessing the capability to effectively analyse data and communicate findings to senior management, organisations must also possess the capabilities to develop strategies as well as identify, execute and manage the specific projects, actions / initiatives to meet those customer needs that will be addressed.
      
      This will also require cross-functional collaboration and sharing of information. Hence this again reinforces the importance of the senior leadership team creating a collaborative / customer-centric culture.
      
3. Processes
   
   It is important to recognise that being customer focused is not a one-off project but a continuous way of doing business. Therefore, organisations must have processes and systems to enable them to continually and effectively gather, understand and respond to customer needs.
   
   In terms of processes, organisations must have processes to:
   
   
   • Gather market, customer requirements, developments
     
   • Analyse market, competitor, customer data
     
   • Integrate insights into business planning processes
     
   • Identify, create and manage projects / initiatives
     
   • Communicate key insights / actions / developments to management and staff across the organisation
     
   These processes should be developed cross-functionally to ensure that the processes take into account the considerations and requirements of the teams / business units that will be involved in such activities. Doing so, will help create buy-in and increase likelihood of the organisation truly operating in a customer-focused manner.
   
4. Knowledge management
   
   It is unlikely that an organisation will be able to function in a systematic, cross-functional, customer-centric manner, if knowledge management systems (KMS) are not implemented.
   
   Companies require a knowledge management system that will enable the organisation to:
   
   
   • Gather and store customer insights
     
   • Share information across the organisation for use by various project teams / business units and management
     
   • Link customer needs to specific projects as well as to specific segments and customers
     
   • Manage and track projects, initiatives and communications
     
   Establishing such a KMS enables all functional areas to have visibility to information that impact their area so that they can act accordingly. They enable organisations to execute the initiatives to deliver the outcomes sought by customers, which will also impact the organisation's competitive position and overall performance.

Benefits of a customer focussed approach

Organisations that have acquired the above-mentioned requirements even to some degree have experienced numerous quantifiable benefits including: 

• Increased share of wallet
  
• Improved customer retention
  
• Improved profitability
  
• Lower cost to serve

Becoming more customer-centric is essential to organisations being able to achieve their desired performance levels and results in tough business environments. However, doing so requires that organisation develop the appropriate leadership, culture, capabilities, processes and systems. This will not be easy or quick to achieve. It will require persistence and focus that will ensure viability and success moving forward.

Source:ceoonline.com